Flights Cost More, Fewer Fly — But Airlines Are Happy Anyway

Fewer people are flying in the U.S. this year — and for the first time since 2020, the total number of air travelers is set to drop. But surprisingly, airlines aren't worried at all.

Here's why: instead of trying to fill every seat, airlines are focusing on charging higher prices. They would rather fly a slightly emptier plane at a high fare than a packed plane at a cheap one.

Why are tickets so expensive? The main reason is jet fuel — the airlines' second-biggest cost after staff wages. Fuel prices have more than doubled compared to last year, so airlines are passing those costs on to passengers.

• Airfare in September was up more than 22% from a year earlier
• Southwest's average fare rose nearly $50, to about $231.69
• This holiday season is expected to bring the highest ticket prices in years

Fewer passengers, but that's the plan Since April, about 9.3 million fewer people passed through airport security compared to last year (a drop of less than 2%). Airlines use a measure called "load factor" — how full a plane is — and American Airlines' load factor fell from 86% to 83.4%.

Executives say they are choosing "yield over load factor" — meaning higher revenue per passenger matters more than how crowded planes are.

Not everyone is shrinking United Airlines actually flew 2.4% more passengers and saw its revenue per seat jump 16% — its biggest rise since the pandemic.

The downside: profits are still getting squeezed Even with higher fares, fuel costs are hurting. American, United, Delta, and Southwest all cut their 2026 profit forecasts this month. American even expects a loss this year.

Airlines are also reducing growth plans, meaning fewer available seats — which could push prices even higher if demand stays strong. One big area of profit: premium seats (business and first class), which can cost hundreds or thousands more than economy.

The bottom line: Flying is getting pricier, fewer people are traveling, but airlines see this as a winning strategy — charging more for the seats they do sell.

This is an AI-generated summary. Read the original article at: https://www.cnbc.com/2026/10/23/airfare-airline-capacity.html